Shai Dardashti, managing director of The Manual of Ideas, recently conducted an exclusive interview with Joseph R. Weidenburner, JD, president and chief investment officer of JRW Financial, based in Glenside, Pennsylvania. JRW Financial builds customized, focused investment portfolios for clients.
The following transcript has been edited for space and clarity.
MOI Global: Tell us about your background and how you became interested in value investing. What events or people shaped your investment philosophy the most?
Weidenburner: My journey to value investing is rather unique, or at the very least unconventional. I studied Political Science and History in college. For as long as I could remember, I planned on attending law school. I graduated with my J.D. and became a lawyer. Nothing in my background or in my studies at any level involved finance or investing. It was Christmas-time during law school one year that I received a Sirius satellite radio. I knew of the company and I knew the product was relatively popular. A family member mentioned Sirius common stock in passing. I decided to look into it a bit, and I found that it was trading for less than 50 cents per share. This was December 2008, right in the midst of the financial crisis. I knew nothing about investing, but I couldn’t believe that this mainstream company had shares of its stock available so cheaply. So I did what any rational, debt-laden student at the time would do. I took the $500 I had to my name and put it in SIRI at $0.14. When the price dropped to $0.05 per share at the height of the crisis, I was scared stiff. Fortuitously I did not sell at that point, eventually cashing in my stock at $0.695 per share. Little did I know at the time that if I held onto the stock for a few years I would have made many times my initial investment.
What I did take from this event, however, was a fascination with the market. I immersed myself in literally every book on investing I could find. As a novice, I spent a fair amount of time testing approaches and theories: technical analysis, trend following, options, you name it. Suffice to say I spent a great deal of money on my investing education, which means I lost at every approach I tried.
It wasn’t until I came across The Essays of Warren Buffett by Lawrence Cunningham that the light of investing clicked on in my brain. Frankly, everything began to make sense for me. I learned about approaching the markets from a businessperson perspective. I learned about the virtues of holding great businesses for the long-term. I learned about the importance of the price versus value relationship. I realized how far from investing my participation in the markets had been to that point. Buffett led me to Graham and Munger and Fisher and Marks.
I voraciously consumed as much content as I could. And then, at random, I came across the work of Christopher Begg at East Coast Asset Management. You profiled him in an interview in the March 2016 Superinvestor issue of Manual of Ideas. His work synthesized all of the distinct teachings I’d learned to that point. Chris’ letters were the capstone course on my investment education. Ultimately, I became enamored with the process of investing, and with family and friends asking for investment ideas and input, I decided to launch JRW Financial as a pursuit of my passion. If I had to select one investor on whom my philosophy and process is built, Chris Begg is that investor.
MOI: Please tell us about the genesis of your organization. What operating principles have guided the firm since its founding?
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